[Senate Report 107-298]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 635
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-298

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PROVIDING FOR THE USE AND DISTRIBUTION OF CERTAIN FUNDS AWARDED TO THE 
   GILA RIVER PIMA-MARICOPA INDIAN COMMUNITY, AND FOR OTHER PURPOSES

                                _______
                                

                October 4, 2002.--Ordered to be printed

                                _______
                                

    Mr. Inouye, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2799]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 2799) to provide for the use and distribution of 
certain funds awarded to the Gila River Pima-Maricopa Indian 
Community, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill (as amended) do pass.

                                PURPOSE

    The purpose of S. 2799 is to authorize the Gila River 
Indian Community to distribute a $7 million judgment award to 
eligible Community members as required by the Indian Tribal 
Judgment Funds Use or Distribution Act and to waive the 
repayment of expert assistance loans made by the Department of 
the Interior to the Community.

                          BACKGROUND AND NEED

    In 1951, the Gila River Indian Community filed a complaint 
before the Indian Claims Commission asserting a claim for the 
failure of the United States to protect the Community's use of 
water from the Gila and Salt Rivers. In 1972 and 1982, the 
Indian Claims Commission and U.S. Court of Claims found the 
United States liable to the Community regarding the claims made 
in the final two dockets of the litigation, Dockets 236-C and 
236-D, respectively. In 1999, the Community agreed to a 
monetary settlement in the amount of $7 million. Final judgment 
was entered against the United States in that amount, and the 
Department of Treasury certified the payment of $7 million, 
less attorneys fees, to be deposited in a trust account on 
behalf of the Community, which is currently being managed by 
the Office of Trust Funds Management at the Department of 
Interior.
    S. 2799 is the final step in resolving litigation that 
began in 1951 and this legislation represents the product of 
close consultation between the Community and the Bureau of 
Indian Affairs regarding the structure and content of the 
distribution plan. The per capita distribution authorized in S. 
2799 would result in a distribution of approximately $400 per 
eligible tribal member. The Community has experienced delays in 
finalizing the enrollment data and establishing the 
distribution plan set forth in the bill. Passage of S. 2799 has 
become one of the Community's highest priorities.

                          LEGISLATIVE HISTORY

    S. 2799 was introduced on July 25, 2002 by Senator McCain 
and was referred to the Committee on Indian Affairs.

                      SECTION-BY-SECTION ANALYSIS

    Sec. 1. Short Title; Table of Contents. The short title of 
S. 2799 is the ``Gila River Indian Community Judgment Fund 
Distribution Act of 2002''. The bill is divided into three 
titles preceded by a findings and definition section.
    Sec. 2. Findings. There are 8 separate findings in the 
bill. These findings recite the history of the water claims 
brought by the Gila River Pima-Maricopa Indian Community 
against the United States on August 8, 1951 before the Indian 
Claims Commission in Gila River Pima-Maricopa Indian Community 
v. United States. These findings also describe the history of 
the claim, the establishment of liability against the United 
States on claims 236-C (1972) and 236-D (1982), the Community's 
settlement of dockets number 236-C and 236-D for a total of 
$7,000,000 (April 27, 1999), the entry of a final judgment of 
$7,000,000 against the United States (May 3, 1999), and the 
certification of $7,000,000 payment, less attorney fees, and 
establishment of a trust account for the Community managed by 
the Department of Interior (October 6, 1999). The findings 
conclude by reciting that the Secretary is required to submit a 
use and distribution plan to Congress for approval before funds 
can be distributed to individual Indians.
    Sec. 3. Definitions. The bill defines ``adult'', 
``community'', ``Community owned funds'', ``IIM account'', 
``judgment funds'', ``legally incompetent individual'', 
``minor'', ``payment roll'', and ``Secretary''.
    The definition of ``Community-owned funds'' has been 
amended and narrowed by the Committee from the original version 
of the bill as introduced to include revenues held by the 
Community that are derived from trust resources and which 
qualify for an exemption under section 7 or 8 of the Indian 
Tribal Judgment Funds Use or Distribution Act (25 U.S.C. 1407, 
1408). These ``Community-owned funds'' are the basis for per 
capital payments under the Act to adults and for transfer in 
trust to the Secretary for minors, deceased beneficiaries and 
incompetent individuals who are eligible for payment but who 
have not been listed on the final roll.
    The Department of the Interior raised concerns about the 
former definition of ``Community-owned funds'' because it 
included revenues derived from ``Community-owned enterprises'' 
which potentially could have included revenuesderived by the 
Community from taxable gaming activities. The Department was concerned 
that under the terms of S. 2799 the Secretary is required to hold these 
gaming revenues in a tax exempt trust account which later was to be 
paid to individual Indians on a per capita basis. The Department was 
also concerned that the mixing of exempt and non-exempt funds could 
change the status of these per capita funds from exempt to non-exempt, 
thus making them taxable to the recipient. The Committee intends to 
make clear that these funds are eligible to be exempt from taxation by 
amending and narrowing the definition of ``community owned funds'' to 
include only those funds derived from sources already exempt from 
taxation.

             TITLE I--GILA RIVER JUDGMENT FUND DISTRIBUTION


Section 101: Distribution of judgment funds

    (a) Per Capita Payments. Section (a) authorizes the 
distribution of the judgment fund amount, less attorneys fees 
and litigation expenses, including all accrued interest, to all 
eligible enrolled members of the Community on a per capita 
basis.
    (b) Preparation of Payment Roll. Requires the Community to 
prepare the payment roll of eligible enrolled members according 
to specific criteria, and includes a description of individuals 
who shall be deemed ineligible to receive per capita payments.
    (c) Notice to the Secretary. Requires the Community to 
notify the Secretary of Interior of the total number of 
individuals eligible to share in the per capita distribution 
after the Community's preparation of the payment roll, and 
requires that such data be broken down into subdivisions 
reflecting the number of individuals falling within the 
following categories: eligible adult members, decreased 
individuals, legally incompetent individuals, and minors.
    (d) Information Provided to the Secretary. Requires the 
Community to provide the Secretary of Interior with information 
necessary to allow the Secretary to establish estate accounts 
for deceased individuals and Individual Indian Money (IIM) 
accounts for legally incompetent individuals and minors.
    (e) Disbursement of Funds. Requires the Secretary to 
disburse to the Community those funds necessary to make the per 
capita payments, not later than 30 days after the payment roll 
has been approved by the Community and the Community has 
reconciled the number of shares that belong in each payment 
category. Provides that once the funds are disbursed to the 
Community, the Community shall be responsible for administering 
and distributing the funds.
    (f) Shares of Deceased Individuals. Requires the Secretary 
of Interior to distribute per capita shares of deceased 
individuals to their heirs and legatees in accordance with 
existing regulations. Where there are no heirs, provides that 
funds revert to the Community and shall be deposited in the 
Community's general fund.
    (g) Shares of Legally Incompetent Individuals. Requires the 
Secretary of Interior to deposit shares of legally incompetent 
individuals into supervised IIM accounts to be administered 
pursuant to existing regulations.
    (h) Shares of Minors. Requires the Secretary of Interior to 
deposit shares of minors into supervised IIM accounts and 
requires the Secretary to hold these funds in trust until the 
minor attains the age of 18 years. Provides that section 
3(b)(3) of the Indian Tribal Judgment Funds Distribution Act 
does not apply, the effect of which is to prevent parents and 
guardians of minors from being able to receive any judgment 
funds on behalf of minors before they reach the age of 18 
years.
    (i) Payment of Eligible Individuals Not Listed on Payment 
Roll. Provides that individuals not listed on the payment roll 
but eligible for payment may be paid from any residual 
principal or interest fund remaining after the Community has 
made its per capita distribution and established its trust 
accounts. If insufficient judgment funds remain to cover the 
cost of payments, the Community is authorized to use Community-
owned funds as defined by section 3(3) of the bill to make 
these payments. In the case of minors, legally incompetent 
individuals, and deceased individuals, the Secretary of 
Interior is authorized to accept and deposit Community-owned 
funds into an IIM or estate account established for a minor, 
legal incompetent or deceased beneficiary eligible to receive 
payment but not listed on the payment roll. Provides that the 
Secretary shall invest these trust funds pursuant to existing 
law.
    As indicated in the discussion under Section 3 
``definitions'', the Committee has amended the definition of 
``Community-owned funds'' under section 3(3)(B) so that 
payments under this section may only be made by the Community 
with funds derived from trust resources which qualify for tax 
exempt status under 25 U.S.C. Sec. Sec. 1407 and 1408.
    (j) Use of Residual Funds. Allows for the transfer of 
residual funds from the Department of Interior to the general 
fund of the Community if the governing body of the Community 
makes such a request of the Secretary and adopts a tribal 
council resolution reaffirming its desire to have these 
residual funds transferred. The bill as introduced was amended 
to require the Community council to enact a tribal resolution 
manifesting its intention to have these residual funds 
transferred into the general fund of the Community.
    (k) Reversion of Per Capita Shares to Tribal Ownership. 
Enables the transfer of funds held in trust and the interest 
accrued thereon by the Secretary to the Community if the per 
capita share is unclaimed for a minimum period of 6 years. A 
new section was added to clarify that a minimum of six years 
must pass before the Community may request that these unclaimed 
funds be transferred into the general fund of the Community.
    Section (k) ``Non-applicability of Certain Law'' was 
deleted because that section was rendered superfluous by the 
changes adopted to the definition of ``Community-owned funds'' 
under section 3(3)(b).

Sec. 102. Responsibility of Secretary; applicable law

    (a) Responsibility for Funds. Provides that after 
disbursement of funds by the Community to eligible adult living 
members as provided under section 101(e)(1), the Secretary 
shall no longer have trust responsibility for those judgment 
funds.
    (b) Deceased and Legally Incompetent Individuals. Provides 
that Secretary shall continue to have a trust responsibility 
for funds retained in accounts for deceased beneficiaries and 
legally incompetent individuals until the date on which those 
funds are disbursed under the Act.
    (c) Applicability of other Law. Provides that pursuant to 
sections 7 and 8 of the Indian Tribal Judgment Funds Use or 
Distribution Act, that all funds distributed under the Act, 
including all interest and investment income thereon, shall be 
considered tax-exempt income to individual recipients.

     TITLE II--CONDITIONS RELATING TO COMMUNITY JUDGMENT FUND PLANS


Section 201. Amendment to plan for use and distribution of judgment 
        funds awarded in Docket 228

    (a) Definition of Plan. ``Plan'' means the plan for the use 
and distribution of judgment funds awarded to the Community in 
Docket No. 228 as modified by Public Law 99-493 (100 
Stat.1241).
    (b) Conditions. Adds conditions providing that section 
3(b)(3) of the Indian Tribal Judgment Funds Use and 
Distribution Act shall not apply to minors' per capita shares 
held by the Secretary under the plan (effect is to prevent 
shares from being distributed to parents and guardians of 
minors prior to age 18), mandates the Secretary hold the 
minors' per capital shares in trust until age 18 is attained by 
the minor, mandates the Secretary not disburse judgment funds 
or interest earned until the age 18 years is attained by the 
minor, and mandates that upon the Community's request, any 
residual principal and interest funds remaining after the 
Community has declared the per capita payments have been 
completed shall be distributed to the Community and deposited 
into the Community's general fund.

Section 202. Plan for use and distribution of judgment funds awarded in 
        Docket 236-N

    (a) Definition of Plan. ``Plan'' means the plan for the use 
and distribution of judgment funds awarded to the Community in 
Docket No. 236-N of the United States Court of Federal Claims 
(59 Fed. Reg. 31092 (June 16, 1994)).
    (b) Conditions. Adds conditions to require amendments to 
the plan to authorize disbursement of residual principal and 
interest to the Community. Adds further conditions providing 
that the provisions of the Indian Tribal Judgment Funds Act 
permitting payment to parents and legal guardians of minors 
shall notbe applicable, and requires the Secretary to hold 
these minors' shares in trust until these minors attain the age of 18 
years.

                   TITLE III--EXPERT ASSISTANCE LOANS

    Section 301. Waives repayment by the Gila River Indian 
Community of expert assistance loans made by the Department of 
Interior to the Community. This section of S. 2799 was amended 
to remove provisions pertaining to waivers of repayment for two 
other tribes in order to have the terms of S. 2799 pertain only 
to the Gila River Indian Community.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    The Committee on Indian Affairs, in an open business 
session on October 1, 2002, ordered S. 2799 as amended, to be 
reported favorably to the Senate.

                   COST AND BUDGETARY CONSIDERATIONS

    At the time of filing this report, the cost estimate of the 
Congressional Budget Office on S. 2799 has not yet been 
received. Compliance with Senate Rule XXVI, paragraph 11(a) is 
therefore impracticable at this time.

                        EXECUTIVE COMMUNICATIONS

    The position of the Administration on S. 2799 has not been 
received.

                    REGULATORY AND PAPERWORK IMPACT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
implementing the bill. The Committee finds that S. 2799 will 
not require the promulgation of regulations so the regulatory 
and paperwork impact should be minimal.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by a 
bill are required to be set forth in the accompanying committee 
report. S. 2799 effects no changes in existing law.

                                  
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